Janice grins as she quickens her pace, dragging both her best friends into H&M. “I need a shopping therapy!” It was a rough week for Janice dealing with tight deadlines, nasty bosses and silly fights with her boyfriend. As she eyed on a piece of gorgeous dress, she could not decide on the red or green one. Driven by emotions, Janice decided to get both. A week later, she stood in front of her wardrobe and regretted a few purchases she made that day.
You’ve probably heard or experience this before. There are also a group of people who spend impulsively due to habit. More than often, they love hoarding pretty things that they don’t even need especially during the sales season. There are also another group of people who spend because they admire their friends’ latest possessions and would love to have similar things. In this article, we will share with you 6 ways in helping you manage your spending.
Budget your monthly expenses
You should do a budget sheet by listing down all your fixed expenses and estimated variable expenses. This disciplines you to only spend within the allocated budget on a monthly basis. You can also download a budgeting app to record your day-to-day expenses which helps you to monitor your spending. Ensure that you review every month end to see if you can reduce on certain things the following month. A few suggestions of budgeting app you can download on your mobile would be Spendee, Toshl Finance, Wally, GoodBudget and Mint. Try them out!
Image credit: dollarbird
Save before you spend
As you have already budgeted your monthly expenses, you should build the habit of saving before you spend every time you receive your paycheck. At the start of every month, just remain the “allocated monthly spending” in your account and transfer the rest of your salary to a separate bank account. You must refrain yourself from touching that account, hence you can consider throwing away the ATM card. By doing this, you will subconsciously think that you only have a limited amount of money left to spend and you will eventually be careful with your spending.
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Question yourself before spending
“It is the last one in stock! The sale is only for today!” These are just marketing gimmicks to mess with your mind. Make it a habit to question yourself before making a purchase. “Do I need it?” Yes. “Do I really need it?” I think so. “Do I really really need it?” Not really! Remind yourself to focus on practicality and if the purchase will provide value to you. This habit will get your mind off from the ongoing discounts and ensure that you make prudent decisions. You can always take your time to think and come back a few days later.
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Tally your Credit Card usage
Credit card should be a financial tool in helping us save money with their cashback programme or to redeem gifts by points collection. However, many used it recklessly and end up with a massive credit debts. It is reported last year that the outstanding credit debt in Malaysia stands at RM36.9 billion. [Source] An effective way to control your credit card spending while benefiting from it would be to ensure that whenever you swipe your credit, check if the funds you allocated for your monthly spending is sufficient to make that purchase. Otherwise, you will end up using your savings to pay your credit card debts. You can also transfer the purchase amount immediately from your savings account to your credit card. If you still cannot control your spending, just FREEZE your credit card!
Image credit: creditcards.com
Declutter your home
This good habit should be cultivated and to be done on a monthly or quarterly basis. Decluttering not only helps you to get rid of unnecessary items, it also keeps you well aware on what you already have at home and what you regretted buying. Realizing your mistakes earlier saves you a lot of money from future impulsive spending! Imagine the damage that may have cost you if you only declutter your home once a year. You would have already accumulate a whole pile of unnecessary material things by then.
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Balance your Lifestyle
With the current wide selection of food and entertainment, it makes it easier for consumers to overspend. People now tend to eat out more compared to having home-cooked meals. During weekdays, we will give excuse that we’re too tired from work to cook while during the weekends we will tell ourselves “It’s finally the weekends, of course we should go out and relax.” Truth is, people have just gotten lazy. You can save a lot of money by preparing some simple food for lunch several times a week. You can also easily bring your own water or other beverages from home rather than spending on a cup of Starbucks. Do ensure that you also allocate a monthly budget for entertainment and leisure activities to avoid overspending.
Image credit: freepik
Above all the suggestions given, the most important factor in managing your finance is YOU. Same theory as losing weight, you have to be disciplined and committed to your end goals.
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